Supplementary memorandum submitted by
Mike Ayala (Cit 54a)
In my last correspondence, I suggested the following
proposal:
1. Require new build projects to incorporate
GSHP technology.
2. Encourage retrofit GSHP installations
through meaningful grants to bring the cost of an installation
to less than that of a typical gas boiler installation.
3. Remove tax from ground source heat pumps
and installations.
4. Increase subsidies to other renewable
energy or micro-generation technologies such as, solar thermal,
photo voltaic, wind generation, etc, so that they are affordable
to at least 80% of households. (In other words, engineer society
so that these technologies are as common as cars, satellite dishes,
and lap-top computers.)
I think consideration should be given to the
following:
Precautions should be implemented when establishing
any grant or subsidy scheme. My experience would suggest that
prices are artificially inflated when grants are involved. Twice
I have found this to be the case. The first time several years
ago I was shocked to receive a quote for cavity wall insulation
through a grant scheme that was roughly three times the price
of all other quotes I received from other non-grant associated
businesses. Recently I received a non-grant associated quote for
a 12kW ground source heat pump system for £4,700 plus £500
for installation. I also received a grant associated quote for
an 11kW ground source heat pump system for £8,325. Both companies
assure me that their machines are of the highest quality from
long established European manufacturers. The sales representative
for the higher quote responded indignantly when I told him the
price of a the lower quote, "Well, that most certainly will
not be from a grant-approved installer".
Setting aside the fact that I think both systems
are greatly overpriced considering what one would receive for
such an offer, I fail to see how there can be £3,000 difference
of value between similar products with similar warranties. I can
only speak anecdotally, but there does seem to be great opportunity
for abuse of government funds for grants and subsidies.
One possible way to avoid wasteful spending
is for the grant scheme to procure the various technologies benefiting
from bulk purchasing and hopefully superior scrutiny. Then grant
recipients would receive the technology from the grant authority
through contracted installers at a capped price. I am sure many
legal hurdles would need to be overcome before such a system could
be implemented, but it would surely provide a barrier against
artificially inflated prices, and the tax payer would receive
the best value for its money invested.
I do not know what the solution is, but I do
know that the effectiveness of any program will be compromised
when abuse and profiteering is allowed or tolerated.
Mike Ayala
March 2007
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